Naive CD4+ T cells produce interleukin-2 (IL-2) upon stimulation by antigen and antigen-presenting cells but can be induced to differentiate into cells that principally produce interleukin-4 (IL-4) or interferon gamma (IFNgamma). The determination of which lymphokine is dominantly produced has a major impact on the protective value of the immune response. Utilizing naive CD4+ T cells from T cell receptor transgenic mice, it was shown that IL-4 itself is the principal factor determining whether T cells develop into IL-4 producers; in addition, IL-4 strikingly suppresses priming for IFNgamma production. In the absence of IL-4, priming leads to cells that produce moderate amounts of IFNgamma. Addition of IL-12 to the priming culture upregulates priming for IFNgamma production and allows such priming to occur even in the presence of IL-4. The physiologic source of IL-4 that determines this pattern of differentiation is a matter of great importance. A specialized population of splenic CD4+ T cells expressing the NK1.1 marker has been identified and shown to promptly produce IL-4 upon in vivo activation with anti-CD3 antibody or superantigens. Two strains of mice (SJL and beta2-microglobulin knockout mice) have both a deficiency in IL-4 production by these cells and impaired differentiation to the production of IL-4 and to the secretion of IgE implying that these cells have an important role in the production of IL-4 at the outset of immune responses. IL-4 action is mediated by binding to a high affinity receptor. This receptor consists of two chains. One binds IL-4 with substantial affinity and also determines the specificity of the signalling pathway. The other (the gamma chain of the IL-2 receptor or gammac) is essential for transducing biochemical signals. The binding of IL-4 to the IL-4 receptor complex results in the phosphorylation of a 170 kDa substrate, designated 4PS, an analog of insulin receptor substrate-1 (IRS-1). Phosphorylation of 4PS/IRS-1 is lost in truncation mutants of the receptor that delete the most membrane proximal tyrosine. The sequence around that tyrosine is homologous to the sequence around a comparable tyrosine in the insulin and IGF-1 receptors; this motif has been termed the I4R motif. A fusion protein containing the I4R motif binds the substrate and the kinase that can catalyze the phosphorylation of IRS-1. The I4R motif appears to act as a docking site for 4PS/IRS-1.